Globe, T&G post disappointing sales

Thursday

Parent company also writes down the value of its investments in the Telegram and in Metro Boston

Revenues at The Boston Globe and its sister paper, the Telegram & Gazette in Worcester, plunged in December, wrapping up another difficult year for The New York Times Co.'s New England operations.

The company also reported $10.5 million in after-tax charges to account for a decline in value of the Telegram and the company's investment in the Metro Boston free daily.

The Times Co. reported on Thursday that ad sales at the two papers and the affiliated boston.com Web site fell to $28.1 million in December, down 17.7 percent from the same four-week period in December 2006.

Total revenue at the Massachusetts papers fell to $592 million in 2007, down 5.2 percent from the comparable 52-week period in 2006. Falling advertising sales were responsible for much of the decline.

Like many newspaper companies, the Times Co. has struggled amid a defection of readers and advertisers to the Internet and corporate mergers that have eliminated several key advertising accounts.

Ad sales fell at the Massachusetts papers in December due to weaknesses in telecom, tech and travel advertising, as well as declines in jewelry ads and department store ads, among other things. The company also reported weak help-wanted and real estate ad sales.

Total ad sales for continuing operations across the company, meanwhile, fell by 12 percent during comparable four-week periods in December 2006 and 2007. Total revenue, including newspaper subscriptions and other sales, fell 8.2 percent.

Janet Robinson, CEO of the Times Co., said the company had seen overall revenue gains in October and November, but advertising softened throughout the company in December. She said the company has seen the trend continue through January.

One bright spot at The Boston Globe was financial service advertising, according to Catherine Mathis, senior vice president of corporate communications for the Times Co. She said ad campaigns by Bank of America, which has been promoting its IRA products, and Fidelity Investments helped the Globe.

The company is trying to boost its circulation revenue by raising the price of the Globe at newsstands within a 30-mile radius of Boston from 50 cents to 75 cents, starting on Monday. The cost of Sunday papers and home subscriptions won't be affected by that price hike, and the daily paper already costs 75 cents outside of the 30-mile radius.

The Times Co. also is planning to reduce annual expenses by $230 million in 2008 and 2009, with $130 million in savings planned for this year.

Mathis said the company regularly reappraises its assets at the end of each year. Following a recent review, the company realized that the value of the Telegram had fallen by $11 million and the value of the company's 49 percent stake in Metro Boston LLC had fallen by $7.1 million. The charges led to a $10.5 million impact, after taxes, to the company's earnings.

That's a significantly smaller write-down than the one the company reported a year ago to reflect a decline in value of its New England group of $814 million, or $736 million after taxes.